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MALAYSIA’S labour market continued to show resilience in February, with loss of employment cases falling to 7,500 from 10,700 in January, according to the Social Security Organisation (Socso), even as global economic uncertainty and geopolitical tensions persist.
The majority of job losses were recorded in the manufacturing sector, followed by wholesale and retail trade, and transportation and storage, reflecting ongoing structural adjustments across key industries. Kuala Lumpur accounted for 38 per cent of total cases, while Selangor made up 24.8 per cent.
Despite the improvement in February layoffs, analysts cautioned that the broader employment outlook remains exposed to external shocks.
Hong Leong Investment Bank (HLIB) said Malaysia’s labour market continued to improve in January, supported by steady economic expansion, although growth momentum has begun to moderate.
The unemployment rate remained unchanged at 2.9 per cent, supported by a year-on-year decline of 4.5 per cent in the number of unemployed persons.
However, this pace of decline was slower than the 5.7 per cent recorded in December, indicating a moderation in improvement.
On a month-on-month basis, unemployment edged up by 0.3 per cent, reversing a 2.0 per cent decline in the previous month. HLIB noted that revisions to labour force data affected both employment and unemployment figures, though proportional adjustments ensured the overall unemployment rate remained stable.
“Nevertheless, the external environment remains highly fluid, particularly the Middle East conflict, which currently shows no signs of a near-term resolution,” the bank said.
HLIB maintained its forecast that Bank Negara Malaysia would keep the overnight policy rate (OPR) unchanged at 2.75 per cent throughout 2026, citing a delicate balance between global growth risks and inflationary pressures stemming from elevated crude oil prices.
Unemployment duration trends showed a mixed picture. The share of those unemployed for less than three months fell slightly to 63.8 per cent from 64.1 per cent, while those unemployed for three to under six months eased to 20.4 per cent from 20.6 per cent.
However, longer-term unemployment recorded a modest increase. Those unemployed for six to under 12 months rose to 10.6 per cent from 10.4 per cent, while individuals without work for more than a year edged up to 5.1 per cent from 5.0 per cent.
The number of actively job-seeking individuals rose marginally to 406,900 in January from 405,500 in December, suggesting a stable but gradually expanding labour pool.
Employment growth slowed to 0.5 per cent year-on-year from 0.8 per cent previously. On a month-on-month basis, employment posted a marginal rebound of 0.04 per cent after a 1.9 per cent contraction in December.
Job creation remained broad-based across services, manufacturing, agriculture, construction and mining. Within the services sector, gains were driven primarily by wholesale and retail trade, accommodation, food and beverage services, and transportation and storage.
By employment category, the number of employees rose 0.03 per cent month-on-month, while own-account workers increased 0.1 per cent following earlier declines. The number of workers temporarily not working also eased to 91,300 from 93,000 previously.
The labour force expanded 0.4 per cent year-on-year, although at a slightly slower pace than in December, while rebounding 0.1 per cent month-on-month, indicating continued confidence in job prospects.
As a result, the labour force participation rate edged higher to 70.9 per cent from 70.8 per cent, reflecting sustained engagement in the workforce despite ongoing global economic headwinds. - April 13, 2026
